ChemoCentryx Inc (CCXI) 2015 Q1 法說會逐字稿

Welcome to the ChemoCentryx First Quarter 2015 Financial Results Conference Call.

At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session.

As a reminder, this conference call will be recorded.

I would now like to turn the call over to Susan Kanaya, Senior Vice President and Chief Financial Officer at ChemoCentryx. Ms. Kanaya, please go ahead.

Thank you. Good afternoon and welcome to the ChemoCentryx First Quarter 2015 Financial Results Conference Call. This afternoon, we issued a press release providing financial results and company highlights for the quarter ended March 31, 2015. This press release is available on our website at www.chemocentryx.com.

Joining me on the conference call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will provide a [corporate] update and review our anticipated milestones for 2015. Following his comments, I will provide an overview of the financial highlights for the first quarter before turning the call back over to Tom for closing remarks.

As a reminder, during today's call, we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions and expectations that are subject to change, and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K to filed on March 13, 2015. You are cautioned not to place undue reliance on these forward-looking statements, and ChemoCentryx disclaims any obligation to update such statements.

In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 6, 2015. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I will now turn the call over to Tom.

Thank you, Susan, and thank you to everyone for joining us on our first quarter financial results conference call. Today, I will discuss our accomplishments since our Q4 conference call and then we will summarize the key milestones that we continue to expect to achieve in 2015.

We sustained the momentum in our clinical programs during the first quarter, and I have several noteworthy accomplishments that are outlined during today's call. These mostly pertain to our two most advanced clinical programs: our chemokine receptor CCR2 program utilizing our two orally administrated potent and selective inhibitors known as CCX140 and CCX872; as well as our complement C5a receptor program with our lead drug candidate, CCX168.

These programs constitute two of the four pillars of value to, which I have referred to in the past. Specifically in these two value areas today, I will discuss the following three key topics: first, plans for the initial presentation of Phase 2 clinical trial data from our lead CCR2 inhibitor, CCX140, in patients with diabetic nephropathy; second, the expansion and presentation of our data from our second orally administered CCR2 inhibitor, CCX872, as we go forward in clinical trials with patients with pancreatic cancer; and third, continued clinical development progress in our complement C5a receptor program with CCX168 are orally available small molecule inhibitor of the C5a receptor that is now being evaluated in three different disease settings, ANCA-associated vasculitis, atypical hemolytic uremic syndrome, and IgA mediated nephropathy.

Let's begin with our recent accomplishments from our CCR2 program. We believe that the chemokine receptor, known CCR2, plays a crucial role in the progression of diabetic chronic kidney disease or diabetic nephropathy. Moreover, should our CCR2 inhibitors CCX140 successfully achieve positive Phase 3 result and obtain regulatory approval, it may indeed change the treatment paradigm for this disease.

As we reported last December, our Phase 2 clinical trial data of CCX140 achieved its primary end point of reduction of protein levels in the urine as measured by urinary albumin creatinine ratio or UACR. These results showed a statistically significant improvement in UACR from baseline in the patients who received oral daily doses of 5 milligrams of CCX140. They can continuously for a 52-week period in addition to the standard of care when compared to those patients taking the standard of care alone. Additionally, we noted important features across secondary endpoints such as the estimated glomerular filtration rate or eGFR particularly in pre-specified patient sub-sets in the trial. We believe that the cumulative result of the Phase 2 trial with CCX140 will inform fundamentally our design of the Phase 3 trial.

The medical community will see some of these results presented later this month at the European Renal Association - European Dialysis and Transplant Association, or ERA-EDTA, meeting which will be held in London. The Phase 2 CCX140 results have been selected as a late breaker oral presentation to be presented by Professor Dick de Zeeuw, M.D., Ph. D., from the Department of Clinical Pharmacy and Pharmacology at the University Medical Center in Groningen, The Netherlands on Friday, May 29th at 11:45 a.m. local. That is London time.

We are very pleased that the oral presentation was selected from numerous abstract submissions to be a late breaker. The presentation itself will run for 13 minutes and will allow Dr. de Zeeuw time to discuss data centered mostly around the primarily end point of the trial and of course safety in the overall 52 week patient population. We look forward to Dr. de Zeeuw's presentation at this internationally recognized medical meeting.

And, of course, this represents a key first step in our plan of continuing presentations and discussion on the data from this trial at other major medical meetings this year and in manuscripts of the data, which we and our clinical colleagues are preparing for submission to peer review publications during the year. Also in the CCR2 program area, we made good progress with our second CCR2 inhibitor in the clinic, CCX872, with the commencement of patient dosing in a multicenter clinical trial in patients with non-resectable pancreatic cancer.

In oncologic disease, tumors can profoundly subvert inflammatory and a sector anti-tumor immune responses. In the tumor cellular microenvironment, CCR2 bearing cells are thought largely to be of an immune suppressive behavior, these are the so-called myeloid-derived suppressor cells or MDSCs.

These CCR2 suppressor cells effectively help tumors hide from the bodies cytotoxic immune response, inhibiting CCR2, and thus the myeloid-derived suppressor cells controlled by CCR2 could therefore lead to the liberation of the cytotoxic immune response against the tumor cells and improved patient survival. The goal of our ongoing clinical trial is to evaluate the safety and efficacy of CCX872 in combination with FOLFIRINOX, one of these current standards of care regimens for advanced pancreatic cancer.

The primary endpoints of the trial are safety, tolerability, and efficacy. This is an open label, multi-center trial and up to 54 patients with non-resectable pancreatic cancer. Patients will initially be treated for 12 weeks and those who achieve at least stable disease as measured by the response evaluation criteria in solid tumors, or the so called resist measurement, will be eligible to continue treatment until disease progression. The primary efficacy measurement will be progression free survival when all the patients have completed at least 24 weeks of treatment.

As you may recall we have already conducted a Phase 1 clinical trial with CCX872 in healthy volunteers. Pharmacodynamics data from this Phase 1 single ascending and multiple ascending dose study in doses ranging from 3 milligrams to 300 milligrams were presented last month at the American Association for Cancer Research or AACR meeting. Our CCR2 inhibitors, CCX872, showed a dose linear pharmacokinetic profile and blocked CCR2 in the treated subjects.

Ex-Vivo CCR2 occupancy and internalization assays, for example, reveal that blood monocytes from the CCX872 treated but not the placebo treated subjects, when paired in their ability to buying to or internalize exogenously added MCP 1, also called CCL2, which is naturally occurring activating ligand for the CCR2 receptor.

The 300-mg daily dose of CCX872 exhibited about a 100% blockade at two hours after dosing. And even a full 24 hours after dosing the receptor was still blocked by about 90% or more. From that study we calculate that the dosing regimen we're using in the now ongoing pancreatic cancer trial will provide over 90% CCR2 inhibition at all times. Importantly from a tolerability perspective, all doses tested including those doses that we're using in the ongoing pancreatic cancer trial were well-tolerated.

Also presented at AACR was a portion of our analysis of genomic database information, including that from tumor cancer genome atlas or TCGA, which is a database that has profiled large numbers of various types of human tumors. Using a proprietary analytical program we evaluated several 100 pancreatic adenoma carcinoma samples from the TCGA and concluded that there are high levels of expression of the chemokine MCP1, which as I mentioned is the natural ligand for CCR2 in pancreatic tumors.

We also found marked co-expression of CCR2 itself in the tumor micro-environment. Our clinical team and our study investigators are encouraged by this and other validating off clinical and pre-clinical research with CCX872.

Towards the end of the year we plan to take a look at the early results from the ongoing pancreatic cancer trial and I look forward to sharing these data with you. This will be our first glimpse into whether CCX872 may play a role in reducing the myeloid-derived suppressor cell content and activity of those cells in the cellular micro-environment and pancreatic cancer, thus enabling a more potent tumor cytotoxic immune response. Our goal is ultimately the addition of our CCR2 inhibitor in an enhanced standard of care regimen for pancreatic cancer patients.

Now I will turn to our second pillar of value, our complement C5a receptor inhibitor program. CCX168 is our lead drug candidate and our complement C5a program. CCX168 is a very potent, orally available, highly specific, small molecule inhibitor of the complement C5a receptor or C5ar. We are currently testing CCX168 in three disease areas and I will take each in-turn.

The first indication is in anti-neutrophil cytoplasmic antibody, or ANCA, associated vasculitis, or AAV for short. We have two ongoing clinical trials in AAV. The first is the European Phase 2 CLEAR trial, which is designed to evaluate the safety and efficacy of CCX168 in a steroid reduction or steroid elimination regimen in the standard of care treatment. This compares with the North American Phase 2 trial known as CLASSIC where we are adding our drug CCX168 on top of the full standard of care.

Enrollment of patients in the CLEAR trial has continued to progress well. And we have now accelerated the timing by which expect to complete enrollment in the middle of this year from our original end of year target. Accordingly, I'm pleased to say that we now plan to report top line data from the clear trial as early as end of this year.

In the CLASSIC trial, we continue to initiate additional clinical sites and enroll patients with newly diagnosed or relapsed AAV. This study will examine the safety and efficacy of two different doses of CCX168 for 12 weeks when added to the standard of care. A third cohort, the control arm, will receive placebo plus standard of care for the same period. I look forward to updating you on the progress of that trial later this year.

As we outlined last quarter, we are also generating additional opportunities for CCX168 through the initiation of clinical trials in patients with atypical hemolytic uremic syndrome or AHUS and also in patients with immunoglobulin A mitigated kidney disease or IgA nephropathy. Our plans to initiate CCX168 Phase 2a proof of concept study in AHUS patients with end stage renal disease remain on track, and we continue to anticipate some initial results by the end of the year. Also at the ERA-EDTA Meeting in London later this month, we will present our proof of concept data that support our initial work with CCX168 in AHUS. We plan to present our data in a poster presentation that outlines the anti-thrombogenic potential of CCX168 in serum from patients with AHUS.

And finally with regard to IgA nephropathy, we have commenced patient enrollment in our Phase 2a pilot study in patients with this disease. This study will test the safety, tolerability, and efficacy of CCX168 in reducing proteinuria in patients with IgA nephropathy, and persistent proteinuria despite supportive therapy with a maximally tolerated dose of renin-angiotensin-aldosterone system or RAAS inhibitors.

The protocol of this study includes an eight to 12-week RAAS inhibitor run-in period prior to receiving CCX168 in order to stabilize patients on the RAS inhibitor therapy. Then patients will receive CCX168 for 12 weeks following that stabilization period. We therefore anticipate dosing patients with CCX168 by mid-year and continuing enrollment into 2016. As this study is also an open label study, we anticipate reporting early data from this trial towards the end of 2015 and during 2016. With CCX168 clinical trials in three different diseases, AAV, AHUS, and IgA nephropathy will have much to talk about with our C5a receptor program in the coming quarters.

With that I would like to turn the call back over to Susan.

Thank you, Tom. As I mentioned earlier, our 2015 first quarter financial results were included in our press release provided earlier this afternoon. Research and development expenses were $8.4 million for the three months ended March 31, 2015, were closely in-line with the $8.2 million reported the same period in 2014. The increase from 2014 to 2015 was primarily attributed the higher expenses associated with CCX168 due to continued patient enrollment in the clear Phase 2 clinical trial in Europe and the classic Phase 2 clinical trial in North America with the treatment of AAV.

Further preparation for and the initiation of a clinical trial of CCX872 or second CCR2 inhibitors, patients with non-resectable pancreatic cancer at the end of 2014 also contributed to this increase. These increases were partially offset by lower expenses associated CCX140 due to the completion of our Phase 2 clinical trials in patients with diabetic nephropathy in the fourth quarter of 2014.

General and administrative expenses were $3.7 million for the three months ended March 31, 2015, compared to $3.5 million for the comparable period in 2014. This increase was primarily due to higher employment related expenses including stock based compensation expense or stock option grants and restricted stock unit awards, and increased professional service and travel expenses relating to our business development effort. Total shares outstanding at March 31, 2015, were approximately 43.7 million shares. Cash, cash equivalent and investments totaled $104.8 million at March 31, 2015.

With that, I will now turn the call back over to you, Tom.

Thank you, Susan. We anticipate several milestones for both our CCR2 and C5a receptor programs, which we expect to drive momentum in 2015. Starting with our CCR2 program we look forward to the first presentation of study results from the CCX140 Phase 2 trial in patients with diabetic nephropathy and a late breaker oral presentation at the ERA-EDTA Meeting in London on May 29th. And we look forward to subsequent presentation of further data and potential peer-reviewed publications as well through the year. We continue to prepare for an end of Phase 2 meeting with regulatory agencies for CCX140, and we plan to report initial data from an open label clinical trial of CCX872 in patients with non-resectable pancreatic cancer in the fourth quarter of 2015.

In our complement C5a receptor program, we look forward to completing enrollment by mid-year in the CCX168 Phase 2 clear trial in Europe in patients with AAV and announced top line results by the end of this year; second, continuing enrollment in the CCX168 Phase 2 classic trial in North America in patients with AAV and in the Phase 2a proof of concept clinical trial in patients with IgA nephropathy; third, presenting our data supporting the anti-thrombogenic potential of CCX168 in serum from patients with AHUS later this month also at the ERA EDTA meeting; and lastly we plan to report initial data from the Phase 2a proof of concept in AHUS trial by year-end.

In closing, I'm very pleased with the first quarter's continued progress, and I look forward to sharing more news with you in the coming months. We will now take your questions. Operator?

(Operator Instructions) Our first question comes from the line of Brian Klein of Stifel. Your line is open.

Hi, guys. Thank you. So, first, on CCX140, can you give us a sense of when you might start a registrational Phase 3 program for that molecule?

Great question, Brian. Thank you. This is Tom speaking. I also have the great pleasure of being joined by Pirow Bekker, our Chief Medical Officer here today. And so he and I will be fielding some of the questions together.

As you can imagine, Brian, the Phase 2 study has generated a tremendous amount of data; some of the data still being analyzed actually. But all of which is informing our Phase 3 trial design. We have got a number of steps we need to go through before we begin Phase 3 including the final analysis of such data. We see some very important information we think in some of the pre-specified subset analyses, which may inform our Phase 3 trial population. In addition, we have got to obviously get our package completed and submitted for end of Phase 2 meeting with FDA and other regulatory agencies. That work is all ongoing.

I've also mentioned in the past that this is a program where there is a tremendous amount of value obviously. We'd like to be able to work in this indication around the world and that's a fairly tall order. So partnering discussions are also part of the mix. So all that is by way of saying that we're moving as rapidly as we can to achieve all of those different tasks. And we would - we're working as expeditiously as we can to launch the Phase 3 study. It will take few quarters at least and we will keep you updated over the next quarter or two as to our projected start time of such trial.

Great. Thanks. And then just a quick question on CCX168. In terms of the open label trial in aHUS, will those patients be refractory to Soliris, or will they be untreated patients?

Hi, Brian, this is Pirow. So the patients are not required to be refractory to Soliris so they would not necessarily have to have had Soliris in the past.

Great. And then just lastly on your CCR2 program -- excuse me, CCR9 program, any update there on the partnering front?

None to discuss today, Brian, but we'll certainly keep you posted. There are some very interesting [science] and publications around the science coming along around CCR9 in IBD, and I think that's going to be very exciting. And I believe others in the industry are finding it quite interesting as well.

Great. Thanks for taking my question.

Thank you, Brian.

Our next question comes from the line of Anupam Rama of JP Morgan. Your line is open.

Hey, guys. Thank you so much for taking the question. Just a quick one on CCX140 at the conference, the ERA-EDTA conference later this month. What additional analyses will be presented beyond kind of what we already know? Is there something specific you'd point us to? And then just a quick one CCX168 in IgA nephropathy. Can you just review the time lines there, I might have missed it? But I think patient enrollment is supposed to start mid-year and then data potentially by the end of the year. I just wanted a quick clarification on that. Thanks.

Yes, thank you, Anupam. I'll take part of the last question first. We've already started enrolling patients in that trial, but there is this interesting run-in period with maximal doses of RAAS inhibitors to stabilize those patients, if you will, and then we start giving them the CCX168.

So we have patients in the trial. They'll start getting their 168 dose in fairly short order and it is an open label trial. So we will be able to start reading out some of the additional information of the data we hope by the end of the year.

So, that will be information that I think we're looking forward to then at least with some of the initial criteria around tolerability as well as possibly efficacy data looking at some of the primary endpoints as we come out of that study or primary efficacy assessment.

In terms of the ERA-EDTA Meeting, so we're very fortunate to have a late breaker presentation but as you may well know, the flip side of that is these late breakers tend to be given very small slots of time; so 13 minutes for presentation. So, essentially, because this is the first presentation of the raw data, if you will, in a public forum, it's probably going focused mostly on trial design, patient demographics and disposition, safety and primary endpoint, and obviously things that impact the primary endpoint assessment.

So, it's going to be very thorough in the treatment of the primary endpoint, which I think is appropriate. We hope that there will be some time for other stuff that we have been analyzing in the secondary but I think the real deep data dive is going to be part of both publications that are under preparation right now with us and our clinical colleagues as well as subsequent meetings this year including major meetings like ASN. Pirow, you may have a different understanding, but that's I think --

I think that's coming along as the next major meeting. So we're anticipating to have, you know, at least an additional presentation on the CCX140 program there and also potentially on some of the other programs.

All right, great. Thanks so much for taking the questions.

Thank you, sir.

(Operator Instructions) Our next question comes from the line of Yaron Werber of Citi. Your line is open.

Hi, this is Kumar Raja in for Yaron. Thank you for taking my question. For the AHUS trial, how many patients do you plan to recruit? And what challenges do you foresee in recruiting these patients? And also for the serum data, you will be presenting in this AHUS patient, what kind of controls did you use in this trials? And how do they compare? And how do you think the serum data will be replicated in humans?

Thank you, Kumar. So they're both excellent questions. I will take the last part and then I will turn the clinical enrollment part back to Pirow. So the serum experiments are very interesting. We take serum from people with diagnosed aHUS. Some of whom we know the genetic deficiency that lead to the dysregulation that leads ultimately to their aHUS disorder. And then we essentially, in the next vivo setting, look at the thrombogenic potential of those sera as flowed over activated microvascular endothelial cells. And as you can well imagine, with the aHUS sera but the not the sera of normal individuals, we get quite big thrombi, which are easy to read in a semi-automated way.

So the controls are all important as you quite rightly pointed out. In the data that we present, some of the data we will show controls with eculizumab or Soliris as the positive control. And in those data sets and we have discussed some of these in public already, we have essentially a dose response with [CCX18] where we can get equivalent or nearly equivalent in addition of thrombus formation ex vivo as both eculizumab and soluble complement CR1 inhibitor as well which essentially knocks out all the complement activation in the assay.

So we also know, too, that the inhibitory activity of CCX168 is in those comparisons as good as the positive controls, and we use all controls at therapeutically relevant levels in the assay that is levels we know we achieve in dosed patients and typically trough levels. So those are very interesting experiments while controlled. And as I mentioned, we will be presenting all those details in London later this month.

And, Pirow, I will let you address what some of the challenges might in trials of that nature.

Yes, so Kumar, the target enrollment for the study is 10 patients at least initially. So it's designed to be obviously the first pilot clinical trial in this study. It is -- because of the rarity of this disease, it's a challenge to enroll these numbers of patients. However, we're working with an investigator that has a large referral network and referral hospital to essentially manage these patients. So we are quite optimistic that we will be able to achieve this enrollment target.

Great. Thank you so much.

Thank you.

Thank you. At this time, I'm showing no further questions in the queue. I would like to turn the call back over to Mr. Thomas Schall, Chief Executive Officer, for any closing remarks.

Thank you very much. And I'd like to thank everyone for their participation and their attention today. I very much look forward to updating you next quarter on the continued momentum in these and other programs of ChemoCentryx. Thanks, everyone. Have a very nice afternoon.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect.